quarterly report september 30, 2017 -...

www.jcl.com.pk

QUARTERLY REPORTSEPTEMBER 30, 2017

Company Information 02

Directors’ Report 04

Balance Sheet 05

Profit and Loss Account 06

Statement of Comprehensive Income 07

Statement of Changes In Equity 08

Cash Flow Statement 09

Notes to the Financial Statements 10CO

NTE

NTS

Javedan Corporation Limited

Board of DirectorsArif Habib Samad A. HabibAlamgir A. ShaikhAbdul Qadir Hassan Ayub AdhiKashif A. Habib Muhammad Ejaz Muhammed Siddiq Khokhar Faisal Anees Bilwany

Chief Financial O�icer & Company Secretary Syed Muhammad Talha

Audit CommitteeAbdul Qadir Kashif A. Habib Muhammad EjazOwais Ahmed

HR & Remuneration CommitteeArif Habib Samad A. Habib Muhammad Ejaz

ChairmanChief ExecutiveDirectorDirectorDirectorDirectorDirectorDirectorDirector

ChairmanMemberMemberSecretary

ChairmanMemberMember

COMPANY INFORMATION

02 Quarterly Report - September 30, 2017

AuditorsReanda Haroon Zakaria & Co. EY Ford RhodesChartered Accountants Chartered Accountants

Bankers Allied Bank Limited MCB Bank Limited Al-Baraka Pakistan Limited National Bank of PakistanAskari Bank Limited Bank Al-Falah Limited Banklslami Pakistan Limited Faysal Bank Limited Habib Bank Limited

Registered O�ice Arif Habib Center, 23, M.T.Khan Road, Karachi Pakistan - 74000, Tel : 32460717-19

Sindh Bank LimitedSummit Bank Limited United Bank Limited The Bank of Punjab

Share RegistrarCentral Depository Company ofPakistan Limited, CDC House, 99-B, Block 'B' S.M.C.H.S Shahrah-e-, Faisal, Karachi.

Fax: 32466824 Website: www.jcl.com.pk

Site O�ice: Naya Nazimabad, Manghopir Road, Karachi -75890 Tel : 92-21-32061997-98, 32061903-04 Fax: 92-21-36770144 Website: www.nayanazimabad.com

03Javedan Corporation Limited

DIRECTORS’ REPORTDear Shareholders,

On behalf of the Board of Directors of Javedan Corporation Limited (JCL), I am pleased to present the financial report for the 1st quarter ended September 30, 2017.

Overview During the period under review, the Company has recorded sale of Rs. 755.68 million as compared to Rs.648.18 million in the corresponding period of last year. Increase in sales mainly represents the recording for sale of Phase 1A inventory as per Company’s policy. This has translated into Profit after Tax (PAT) at Rs.299.91 million against PAT of Rs. 276.75 million in the corresponding period of last year. Following is the summary of comparative unaudited financial results:

Future Outlook

The brand, Naya Nazimabad, has been established and we are hopeful that it will receive more recognition with future development work and value added projects. The Company is expecting to sell available remaining inventories during this financial year and recognition of sale of remaining banglows as per accounting policy. Thereafter company’s balance land of 600 acres will be launched. Further, the company has decided to buy back the commercial land to develop Apartments, Shops and Malls to be launched soon. Keeping in view of the above, the future of the Company look stable and bright.

Acknowledgement

The management of the Company would like to thank all the financial institutions, Securities and Exchange Commission of Pakistan, Pakistan Stock Exchange, customers and staff members who have been associated with the Company for their support and cooperation. We would also like to thank Board of Revenue, Lyari Development Authority, Sindh Building Control Authority, Environmental Protection Agency and above all Government of Sindh for their support to the project. May Allah bless us in our efforts. A’meen!

Particulars

September 30, 2017

(Un-Audited)

September 30, 2016

(Un-Audited)(Rupees in thousands)

Net sales 755,681 648,182Cost of sales (264,874) (270,427)Gross Profit 490,806 377,755Profit before Taxation 414,544 283,235Taxation (114,628) (6,482)Profit after taxation 299,916 276,753EPS - Basic (in rupees) 1.82 1.92EPS - Diluted (in rupees) 1.62 1.45

Samad A. HabibChief ExecutiveNov 04, 2017



Chief Executive Director

Note

(Un-audited)September 30,

2017

Restated (Audited)June 30,

2016 --------Rupees in '000--------

JAVEDAN CORPORATION LIMITED

BALANCE SHEET (UN-AUDITED)AS AT SEPTEMBER 30, 2017

ASSETS Non-current assets Property and equipment 6 1,624,990 1,627,159 Deferred taxation 290,049 397,120 Long term security deposits 5,642 4,836 Total non-current assets 1,920,681 2,029,115 Current assets Development properties 7 9,986,128 9,783,059 Trade debts 2,210,698 2,436,952 Advances 8 169,116 155,186 Trade deposits, short term prepayments and other receivables 9 11,546 13,767 Cash and bank balances 108,556 25,402 Total current assets 12,486,044 12,414,366 Total assets 14,406,725 14,443,481 EQUITY AND LIABILITIES Authorised share capital Ordinary & Preference share capital 2,900,000 2,900,000 Issued, subscribed and paid-up share capital Ordinary share capital 1,570,510 1,570,510 Preference share capital 451,502 451,502 Reserves 10 2,476,712 2,058,836 4,498,724 4,080,848 Surplus on revaluation of freehold land 6,044,513 6,148,628 Non-current liabilities Long term finance 11 1,163,038 1,188,038 Liabilities against assets subject to finance lease 1,768 953 Deferred liabilities 15,547 15,928 Total non-current liabilities 1,180,353 1,204,919 Current liabilities Trade and other payables 12 652,836 628,113 Mark-up accrued 13 32,301 17,767 Advance from customers 1,069,495 1,451,435 Liability against performance obligation 265,373 265,373 Short term borrowings 14 229,608 213,166 Current maturity of: Long term finance 432,038 432,038 Liabilities against assets subject to finance lease 1,484 1,194 Total current liabilities 2,683,135 3,009,086 Contingencies and commitments 15 Total equity and liabilities 14,406,725 14,443,481

Sales 755,681 648,182 Cost of sales (264,874) (270,427) Development cost - - Gross profit 490,806 377,755 Expenses Administrative expenses 16 (61,960) (45,074)Marketing and selling expenses (5,030) (26,835)Finance cost (13,212) (24,584) (80,202) (96,493) Other income 3,940 1,973 Profit before taxation 414,544 283,235 Taxation Current 17 (7,557) (6,482)Deferred 17 (107,071) - (114,628) (6,482) Profit after taxation 299,916 276,753 ---------------Rupees--------------- Earning per share Restated Basic 18 1.82 1.92 Diluted 18 1.62 1.45

Note

Quarter EndedSeptember 30,

2017

Restated

September 30,2016

--------Rupees in '000--------



CONDENSED INTERIM PROFIT AND LOSS ACCOUNT - (UN-AUDITED) FOR THE QUARTER AND THREE MONTHS ENDED SEPTEMBER 30, 2017


Sales 755,681 648,182 Cost of sales (264,874) (270,427) Development cost - - Gross profit 490,806 377,755 Expenses Administrative expenses 16 (61,960) (45,074)Marketing and selling expenses (5,030) (26,835)Finance cost (13,212) (24,584) (80,202) (96,493) Other income 3,940 1,973 Profit before taxation 414,544 283,235 Taxation Current 17 (7,557) (6,482)Deferred 17 (107,071) - (114,628) (6,482) Profit after taxation 299,916 276,753 ---------------Rupees--------------- Earning per share Restated Basic 18 1.82 1.92 Diluted 18 1.62 1.45


Profit after taxation 299,916 276,753 Other comprehensive income - - Total comprehensive income for the period 299,916 276,753

Note

Quarter EndedSeptember 30,

2017 September 30,

2016 --------Rupees in '000--------


CONDENSED INTERIM STATEMENT OFCOMPREHENSIVE INCOME - (UN-AUDITED)FOR THE QUARTER AND THREE MONTHS ENDED SEPTEMBER 30, 2017


CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation 414,544 283,235 Adjustments: Depreciation 2,868 2,123 Amortization - 527 Finance cost 13,212 24,584 Interest income - (7)Cash flow from operating activities before working capital changes 430,624 310,462 Working capital changes (Increase) / decrease in current assets Development properties (186,229) 107,492 Trade debts 226,254 (328,936)Advances (13,930) (64,010)Deposits, prepayments and other receivables 2,221 15,104 Increase / (decrease) in current liabilities Advance from customers (381,940) 80,913 Trade and other payables 31,011 (8,964) (322,613) (198,401)Net cash generated from operations 108,011 112,061 Income tax paid - (695)Finance cost paid (including borrowing cost capitalized) (15,518) (79,094) Deferred liability (381) (568)Net cash generated from operating activities 92,112 31,704 CASH FLOW FROM INVESTING ACTIVITIES Fixed capital expenditure (699) (941)Interest received - 7 Long term deposits paid (806) (653)Net cash used in investing activities (1,505) (1,587) CASH FLOW FROM FINANCING ACTIVITIES Long term finance (25,000) (35,087)Principal repayment of finance lease 1,105 (293)Proceeds from short term borrowings 16,442 - Net cash used in financing activities (7,453) (35,380) Net increase / (decrease) in cash and cash equivalent 83,154 (5,263) Cash and cash equivalent at beginning of the period 25,402 34,086 Cash and cash equivalent at end of the period 108,556 28,823 The annexed notes form an integral part of these condensed interim financial information.

Quarter Ended

Note

September 30,2017

September 30,2016

--------Rupees in '000--------



CONDENSED INTERIM CASH FLOW STATEMENT- (UN-AUDITED)FOR THE QUARTER AND THREE MONTHS ENDED SEPTEMBER 30, 2017



Balance as at June 30, 2016 1,293,683 178,776 914,713 11,966 63,500 119,240 2,581,878 Transaction with owners "Reversal of dividend payable on preference shares converted into ordinary shares" - - - - - 305,185 305,185 "Conversion of preference shares into ordinary shares" 276,826 491,570 (463,211) - - (305,185) - Dividend on Preference Shares at 12% - - - - - (105,043) (105,043) Profit for the period - - - - - 1,095,373 1,095,373 Other comprehensive income - - - - - (2,579) (2,579) - - - - - 1,092,794 1,092,794 Transfer of surplus on revaluation of land - - - - - 206,032 206,032 Balance as at June 30, 2017 1,570,509 670,346 451,502 11,966 63,500 1,313,023 4,080,846 Dividend on Preference Shares at 12% - - - - - 13,846 13,846 Profit for the quarter and three months endedSeptember 30, 2017 - - - - - 299,916 299,916 Other comprehensive income - - - - - - - Total comprehensive income - - - - - 299,916 299,916 Transfer of surplus on revaluation of land - - - - - 104,115 104,115 Balance as at September 30, 2017 1,570,509 670,346 451,502 11,966 63,500 1,730,900 4,498,723


STATEMENT OF CHANGES IN EQUITY (UNAUDITED)FOR THE QUARTER AND THREE MONTHS ENDED SEPTEMBER 30, 2017

--------------------------------------------------------- Rupees in '000 ---------------------------------------------------------

Ordinaryshare capital

SharePremium

Preferenceshare capital

Capitalreserve

Generalreserve

Accumulatedlosses

Revenue ReservesTotal

CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation 414,544 283,235 Adjustments: Depreciation 2,868 2,123 Amortization - 527 Finance cost 13,212 24,584 Interest income - (7)Cash flow from operating activities before working capital changes 430,624 310,462 Working capital changes (Increase) / decrease in current assets Development properties (186,229) 107,492 Trade debts 226,254 (328,936)Advances (13,930) (64,010)Deposits, prepayments and other receivables 2,221 15,104 Increase / (decrease) in current liabilities Advance from customers (381,940) 80,913 Trade and other payables 31,011 (8,964) (322,613) (198,401)Net cash generated from operations 108,011 112,061 Income tax paid - (695)Finance cost paid (including borrowing cost capitalized) (15,518) (79,094) Deferred liability (381) (568)Net cash generated from operating activities 92,112 31,704 CASH FLOW FROM INVESTING ACTIVITIES Fixed capital expenditure (699) (941)Interest received - 7 Long term deposits paid (806) (653)Net cash used in investing activities (1,505) (1,587) CASH FLOW FROM FINANCING ACTIVITIES Long term finance (25,000) (35,087)Principal repayment of finance lease 1,105 (293)Proceeds from short term borrowings 16,442 - Net cash used in financing activities (7,453) (35,380) Net increase / (decrease) in cash and cash equivalent 83,154 (5,263) Cash and cash equivalent at beginning of the period 25,402 34,086 Cash and cash equivalent at end of the period 108,556 28,823 The annexed notes form an integral part of these condensed interim financial information.


1 STATUS AND NATURE OF BUSINESS

1.1 Javedan Corporation Limited (the Company) was incorporated in Pakistan on June 8, 1961, as a public limited company under the repealed Companies Act, 1913 (now Companies Ordinance, 1984) and is listed on Pakistan Stock Exchange Limited (previously Karachi Stock Exchange Limited) . The registered office of the Company is located at Arif Habib Center, 23, M.T Khan Road, Karachi.

1.2 The Company has ceased its cement business since July 01, 2010 and management has

developed business diversification strategy for utilizing the Company’s land for developing a housing scheme, “Naya Nazimabad”, which will include bungalows, open plots, flat sites, commercial sites, appartments, malls, shopping centres and shops etc. The housing project is located at Manghopir, Karachi. The Company's layout plan of the project was approved by Lyari Development Authority vide letter number LDA/PP/2010/255 on March 02, 2011 and revised master plan approved vide letter No CTP/LDA/112 and has obtained No Objection Certificate from Sindh Building Control Authority having NOC # SBCA/D.D(D-II)/985/ADV-503/2011 on November 12, 2011 and revised NOC # SBCA/DD(D-II)/985 & 991/ADV-584/2013. The company is also the member of Association of Builders and Developers of Pakistan (ABAD) and chamber of commerce and indurstries.

2 BASIS OF PREPARATION 2.1 These condensed interim financial information of the Company for the 1st quarter ended

September 30, 2017 have been prepared in accordance with the requirements of the International Accounting Standard 34 - Interim Financial Reporting and provisions of and directives issued under the Companies Ordinance, 1984. In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed.

2.2 These condensed interim financial information are presented in Pakistani Rupees which is also

the Company's functional currency and figures presented in these condensed interim financial information have been rounded off to the nearest thousand of Rupees.

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies, applied in the preparation of this condensed interim financial statements are the same as those applied in the preparation of the annual audited financial statements of the Company for the year ended June 30, 2017.

4 ACCOUNTING ESTIMATES, JUDGMENTS AND FINANCIAL RISK MANAGEMENT

The preparation of the condensed interim financial information in conformity with approved accounting standards as applicable in Pakistan requires management to make estimates, assumptions and use judgments that affect the application of policies and reported amounts of assets and liabilities and income and expenses. Estimates, assumptions and judgments are continually evaluated and are based on historical experience and other factors,

including reasonable expectations of future events. Revision to accounting estimates are recognized prospectively commencing from the period of revision.


NOTES TO THE CONDENSED INTERIM FINANCIALINFORMATION (UN-AUDITED)FOR THE QUARTER AND THREE MONTHS ENDED SEPTEMBER 30, 2017



Note

September 30,2017

June 30,2017

--------Rupees in '000-------- 6 PROPERTY AND EQUIPMENT Operating fixed assets 6.1 1,624,990 1,627,159 6.1 Operating Fixed Assets Opening written down value 1,627,159 1,549,100 Additions during the period 6.2 699 28,317 Disposals during the period - cost - (1,691) Depreciation charge for the period (2,868) (11,367) Depreciation charge on disposal - 753 Capital work in process - 61,983 Closing written down value 1,624,990 1,627,159 6.2 Additions during the period Furniture, fixtures and equipments 152 5,777 Vehicles 286 20,944 Computer Equipments 105 1,596 Other Assets 156 - 699 28,317

7 DEVELOPMENT PROPERTIES Land Opening balance 8,151,484 8,151,484 Development expenditure Opening balance 4,649,679 2,933,827 Add: Incurred during the year 451,182 1,715,852 5,100,861 4,649,679 Borrowing costs related to land Opening balance 1,226,698 1,129,454 Add: Capitalized during the year 16,840 97,244 1,243,538 1,226,698

14,495,882 14,027,861 Less: Transferred to cost of sales to date (3,250,323) (2,985,371) Transferred to receivables from customer to date (1,259,431) (1,259,431) 9,986,128 9,783,059

5 FINANCIAL RISK MANAGEMENT

The Company's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended June 30, 2017.

8 ADVANCES Considered good Advances to suppliers 34,590 74,393 Advances to contractors 113,656 64,010 Advances against services and expenses 20,870 16,783 169,116 155,186

9 DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES Deposits Guarantee margin 225 225 With contractors 2,679 2,679 Security deposit with Sindh Building Control Authority 3,345 3,345 Others 81 71 6,330 6,320 Provision for impairment (2,904) (2,904) 3,426 3,416 Prepayments 3,988 1,219 Other receivables - Considered good Related party International Builders and Developers (Private) Limited 34 34 Sales tax refundable 4,703 4,703 Excise duty refundable 574 574 Others 3,524 8,524 8,801 13,801 Provision for impairment (4,703) (4,703) 11,546 13,767

10 RESERVES Capital reserves Tax holiday reserve 11,966 11,966 Share Premium 670,346 670,346 Revenue reserve General reserves 63,500 63,500 Accumulated Profit 1,730,900 1,313,024 1,794,400 1,376,524 2,476,712 2,058,836

Note

September 30,2017

June 30,2017

--------Rupees in '000--------


11 LONG TERM FINANCE - SECURED From banking companies Allied Bank Limited Debt asset swap arrangement 230,076 230,076 National Bank of Pakistan Limited Term Finance Certificates 690,000 690,000 Bank Islami Pakistan Limited Diminishing Musharika 175,000 200,000 Syndicated loan facility 500,000 500,000 Total long term financing 1,595,076 1,620,076 Current maturity of long term finance (432,038) (432,038) 1,163,038 1,188,038 12 TRADE AND OTHER PAYABLES Creditors 10,019 13,358 Accrued liabilities 255,485 237,660 Retention money payable 23,346 23,346 Power Cement Limited - Related Party 4,094 7,842 Withholding tax payable 2,605 10,022 Payable against cancellation of plots 13,467 13,467 Dividend accrued on preference shares 317,406 303,560 Unclaimed dividend 2,834 2,834 Income tax payable 23,581 16,024 652,836 628,113 13 MARKUP ACCRUED Accrued markup on long term finance 28,835 15,121 Accrued markup on short term borrowings 3,466 2,646 32,301 17,767

14 SHORT TERM BORROWINGS From banking companies - secured Sindh Bank Limited 229,608 213,166

15 CONTINGENCIES 15.1 Contingencies There were no changes in contingencies since the last audited financial statements as at

June 30, 2017.

Note

September 30,2017

June 30,2017

--------Rupees in '000--------


16 ADMINISTRATIVE EXPENSES Salaries, wages and other benefits 31,440 20,159 Fees and subscriptions 2,680 1,687 Depreciation 2,868 2,123 Amortization - 527 Vehicle running expenses 3,138 3,140 Legal and professional 1,860 652 Repair and maintenance 3,211 2,095 Rent, rates and taxes 1,575 1,199 Utilities 7,231 6,971 Donation 775 1,711 Communication 1,558 722 Travelling and conveyance 125 140 Insurance 1,047 738 Printing and stationery 882 605 Entertainment 1,131 783 General expenses 2,437 1,822 61,960 45,074

17 TAXATION - Current tax (7,557) (6,482) - Deferred tax (107,071) - (114,628) (6,482)

18 EARNING PER SHARE Basic Profit after tax (Rupees in '000) 299,916 276,753 less: Dividend on preference shares (Rupees in '000) (13,846) (27,825) Profit attributable to ordinary shareholders (Rupees in '000) 286,070 248,928 Weighted average number of ordinary shares 157,051,028 129,368,399 Earning per share - (In Rupees) 1.82 1.92 Diluted Profit after tax (Rupees in '000) 299,916 276,753 Weighted average number of ordinary shares 184,893,283 190,785,602 Earning per share - (In Rupees) 1.62 1.45

Note

September 30,2017

September 30,2016

--------Rupees in '000--------

September 30,2017

Restated September 30,

2016 --------Rupees in '000--------


Note

September 30,2017

June 30,2017

--------Rupees in '000--------

19 TRANSACTIONS WITH RELATED PARTIES

The related party comprise of associated undertakings, key management personnel and post employment benefit plan. The Company carries out transactions with various related parties as per agreements. Details of balances and transactions with related parties during the period, other than those which have been disclosed elsewhere in this condensed interim financial information, are as follows:

Associates Purchase of cement (OPC/SRC) 10,084 69,062 Payments made for purchase of cement 13,832 68,521 Purchase of concrete 5,712 67,931 Payments made for purchase of concrete 6,484 67,986 Sale of plots - 503,773 Receipt from sale of residential plots - 102,338 Mark-up paid - 39 Key management personnel Sale of residential plots - 1,130 Receipt against sale of residential plots - 1,130 Other related party Sale of residential plots - 56,338 Receipts against sale of residential plots - 56,338

20 DATE OF AUTHORIZATION FOR ISSUE These financial statements were authorized for issue on November 04, 2017 by the Board of

Directors of the Company. 21 GENERAL Figures have been rounded off to the nearest of thousand rupees.



JAVEDAN CORPORATION LIMITEDArif Habib Center, 23 - M.T. Khan Road, Karachi, Pakistan - 74000

Customer Support Center, Javedan Corporation Limited, Naya Nazimabad - Karachi - 75890UAN: 111-511-611 | [email protected] | www.nayanazimabad.com

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